Martoma Asks To Remain Free Pending Insider-Trading Appeal

Oct 6 2014 | 11:51am ET

Former SAC Capital Advisors portfolio manager Mathew Martoma has asked a Manhattan court to allow him to remain free while he appeals a nine-year sentence for insider trading.

Martoma's lawyer Richard Strassberg told U.S. District Judge Paul Gardephe that his client, who is scheduled to begin serving his sentence on November 10, is not a flight risk. Moreover, he promised to raise “substantial questions” in his appeal which may result in the February conviction being overturned, reported Bloomberg.

Although he's yet to submit his opening brief to the federal appeals court in New York, a hint of what it will contain may be found in a trial court filing made after his conviction. In it, Martoma argued he was convicted on insufficient evidence and that jurors were prejudiced by reports of his 1999 expulsion from Harvard Law School for forging a transcript. Gardephe at that time denied the request to overturn the verdict.

Strassberg said in the letter that Martoma will also argue that evidence was improperly kept out of the trial and that his sentence is unreasonable. If Gardephe rejects Martoma's bid for freedom during the appeal, Strassberg has asked that he delay his client's surrender date for three weeks so Martoma can ask the appeals court to grant the request.

In February of this  year, a federal jury found Martoma guilty of conspiracy and securities fraud. Prosecutors said he earned or saved SAC $276 million trading on confidential information about an Alzheimer's drug trial.

As part of the sentencing, the federal judge also ordered that Martoma pay back his $9.38 million in bonuses.

Martoma was the eighth former SAC employee to be convicted of insider-trading during the government's crackdown on the crime.

In November of 2013, Stamford, Conn.-based SAC, one of the most successful hedge funds in history, agreed to plead guilty to insider trading charges, return outside capital and pay a record $1.8 billion fine/forfeiture. Rechristened 72Point Asset Management, it now manages founder Stephen A. Cohen's own multi-billion fortune.

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